Omantel put itself firmly on the wholesale map in 2014. Investing considerably in a number of the region’s leading subsea cable projects, the wheels are in motion for the company’s first venture into access infrastructure in Europe.
With plenty more expected to come in 2015, Omantel needs a capable pair of hands to drive it though this period of development. And Talal Said Marhoon Al Mamari seems just the man for the job.
With a career at Omantel spanning more than 20 years, Al Mamari was appointed CEO at the company in June 2014, and plans to move with the changes taking hold of the wholesale industry to stay ahead of its customers’ demands.
Al Mamari wants to make Omantel the carrier of choice for international operators and content providers entering the Middle East, as well as the access point to more developed markets for regional customers.
A French connection
Not one to shy away from a challenge, Al Mamari is driving Omantel’s entrance into the European market with the launch of a landing point and two carrier-neutral data centres in Marseille, France.
This, Al Mamari says, is largely thanks to the launch of the Asia Africa Europe-1 (AAE-1) cable, due to go live in 2016.
Stretching 15,000km from south east Asia to Africa and Europe via Egypt, the AAE-1 cable is supported by 17 carriers, including four operators from across the Middle East.
While many of these Middle Eastern consortium members are using their presence in the cable to enter emerging markets across Asia and Africa – Ooredoo, for instance, is using the project to support its operations in Myanmar – Omantel is taking a different challenge by entering the European market.
The Omani operator is launching infrastructure in France as part of an initiative to provide carriers using the cable with more competitively priced access to and from Europe.
“For us, this was a case of seeing an opportunity to open up the European market with new competition and to ensure the success of the AAE-1 cable by increasing its cost-competitive position and taking away the backhaul cost component,” Al Mamari explains.
Traditionally, dominant market players have charged high prices for backhaul and interconnectivity from subsea cable landing stations, and operators often have no option but to fork out. However, Omantel’s infrastructure is designed to provide them with an alternative access point. In line with the AAE-1 launch, the infrastructure project in France has a proposed completion date in 2016. Although Al Mamari could not disclose specific details, he also confirmed that other projects, similar to Omantel France, are under discussion.
As well as bolstering international connectivity, Omantel also increased Oman’s regional connectivity in 2014. In March, in partnership with Qatar’s Ooredoo, the company revealed plans to launch the Gulf Express Gateway (GEG), which will provide a direct connection between Oman and Qatar.
“Qatar is a rapidly growing country with many major projects underway and world-class events coming up,” Al Mamari says.
The GEG will allow Omantel to deliver multiple services to Qatar, as well as provide Ooredoo with access to Omantel’s cable systems from the Middle East to the rest of the world. The route is undergoing feasibility testing and Al Mamari expects it to be completed and ready for service at the end of 2015.
These new infrastructure projects will not only help bring additional capacity to the Middle East region, but substantially enhance redundancy, says Al Mamari.
He cites an example in March when six cables in the Gulf fell victim to cuts.
“When there are as many as six cuts in the region at the same time, routing traffic to alternate systems becomes limited,” Al Mamari explains.
Demand in Oman
Omantel’s efforts to enhance its international connectivity will help counter the challenge in its domestic market, where it faces a changing regulatory environment and growing competition from OTT players.
While he describes the country’s telecoms market as “dynamic”, Al Mamari also says the company has faced regulatory delays in obtaining permits to roll out its network, causing delays in the delivery of services to its customers.
The company is under growing pressure to act fast in its domestic market, where it is up against increasing competition. Its domestic rival Nawras has also been working hard to develop its connectivity services in 2014. In March, it partnered with satellite provider SES to provide GSM backhaul and broadband to its customers in Oman, focussing particularly on more rural areas.
As the first Middle Eastern country to introduce the MVNO model, there are presently four MVNOs operating in the market. These are Samatel, Mazoon, Renna and FRiENDi, with the latter two running on Omantel’s network. Omantel, however, remains the market leader in mobile and fixed-line, and Al Mamari is quietly confident of building on this. However, he is concerned by competition from over-the-top (OTT) players.
With the use of smart devices in Oman on the rise, Al Mamari says that over 80% of smartphone users in the MENA region are using OTT applications for instant mobile messaging.
“Telecoms operators stand completely exposed to the likes of Google, Apple, Facebook, Skype, WhatsApp and other OTT players,” he says. “This is a completely new breed of global competitor which is turning the tables for traditional telcos.”
Al Mamari says that increased OTT activity is also putting pressure on operators to spend more on network expansion. Omantel’s average capex-to-revenue ratio, for example, increased from 17% to 24% in 2014 as a result of this shift.
He also notes the resulting surge in data usage, which he says is more than doubling in Oman each year. “The varied opportunities when using data are limitless,” Al Mamari says.
As part of this attempt to meet customer demand, Omantel is in the early stages of 4G deployment, which Al Mamari believes will have a “major impact on the usage patterns and how we consume data and with that, the volumes”.
As of June 2013, Omantel’s LTE coverage included 400 sites across the Sultanate. The company also has partnerships with many of Oman’s neighbouring countries for LTE roaming, including Saudi Arabia and the UAE.
Al Mamari says that he has also noticed a growth in IP transit that is “substantially higher on the domestic side”
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International integration
In a bid to address this, Omantel is not only expanding its international network by acquiring and investing in subsea and terrestrial cable systems, but also by localising as much of its content as possible.
“We host many global content providers and content delivery networks (CDNs), and this has a positive impact on quality for both our domestic and international customers,” Al Mamari says. “It also decreases the cost of bringing in content to our network.”
New to the role in June last year, Al Mamari has a number of growth targets for Omantel as it moves into 2015. This year will see the BBG – a direct cable between Singapore and Oman with a planned 68ms latency – become ready for service.
The company will also be focussing on the EPEG (Europe-Persia Express Gateway) cable between Oman and Frankfurt.
Today, Al Mamari says, the EPEG cable has only 92ms latency between Oman and Frankfurt, but with the launch of the BBG cable, he expects to offer only 160ms RTD latency between Frankfurt and Singapore.
“This will result in a number of new opportunities that we will also support by rolling out additional PoPs worldwide, to provide Middle Eastern operators with access to global hubs,” he says.
As well as focussing on its subsea cable developments, Al Mamari says that mobile and fixed-line broadband will remain key areas for Omantel.
“To support the growth of broadband services, we will continue to invest in expanding our networks and introduce content-based services,” he adds. “We will also enhance our fixed broadband offering and value proposition, which is a high growth area in Oman.”
The enterprise sector will also be of integral importance for Omantel, and Al Mamari, noticing the digital shift across the industry, wants to move away from traditional corporate connectivity by offering end-to-end solutions to customers.
Having been with Omantel since 1992, Al Mamari describes it as a “vibrant yet dynamic organisation that adapts itself easily to the ever-changing market conditions of wholesale”. And wholesale, Al Mamari says, differs greatly from the company’s consumer and corporate arms.
“The sales cycles are longer, the projects and deals larger, the partners global, and it requires a long investment horizon often twice what we are used to in our national market,” he explains. “However, as an Omani and as CEO at Omantel, it is exciting and with very great pride that we see the strategies that we laid down some six years ago starting to place Omantel on the map as the trusted, professional and transparent go-to provider for international players wanting to do business in the Middle East.”
Al Mamari plans to continue this upward streak for the company with a management style based on collaboration and team-work.
“We are trying to promote a decentralised decision-making process to empower the different management levels across the organisation and instil the sense of responsibility and accountability,” he concludes.
